Senators Boost Flood Insurance 'Time Out'

Senators Boost Flood Insurance 'Time Out'

Daily Real Estate News |
Wednesday, January 08, 2014

NAR President-elect Chris Polychron (far left) joins a bipartisan group of senators yesterday in support of a bill that would press the pause button on destabilizing changes to flood insurance premiums.

"This bill is going to come to the floor very, very soon," Sen. Chuck Schumer (D-N.Y.), a member of the Democratic Senate leadership, said yesterday at a press conference held on Capitol Hill. NAR President-elect Chris Polychron joined the senators on the podium to show NAR's support for the bill.

The bill is called the "Flood Insurance Affordability Act" (S. 1846), introduced by Sen. Robert Menendez (D-N.J.), and today has 28 sponsors from both parties. It would require the Federal Emergency Management Agency, which administers the federal flood insurance program, to stop implementing changes to premiums so it can investigate and report to Congress on the magnitude of these increases. FEMA has been phasing out longstanding premium subsidies to certain home owners and requiring premiums to rise to their actuarial level. But questions have been raised by lawmakers, industry groups, and consumers about the accuracy of the levels that are being set.

"People were paying $800 or $1,000 and now we’re talking about $10,000 or more," said Sen. Menendez at the press conference. "That’s simply unsustainable.”

The bill would also require FEMA to set up an advocate so consumers have a place to turn if they get stuck with confusing or overly high rate quotes and provide a process for the agency to start working with industry groups on a longer-term solution to the affordability problem.

NAR has been a major supporter of lawmakers' efforts to require a pause in the premium change, and close to 80,000 of its members have sent letters to their members of Congress in support of the bill. A companion bill in the House is also gaining strength, with about a third of House members signed on as cosponsors.